D.C. Appeals Court Strikes Down Net Neutrality Rules

The D.C. Court of Appeals ruled in favor of Verizon in a net neutrality case on Tuesday, striking down portions of the FCC Open Internet rules that require telecom companies treat all Internet traffic equally.

The decision could have far-reaching implications for the future of the Internet and how Internet Service Providers (ISPs) treat content online. Potentially, ISPs could now give priority to certain sites instead of others, favoring their own services to disadvantage rivals, or even selling preferential treatment. For example, Netflix could pay Time Warner Cable to to deliver its streams more quickly than Hulu.

The court ruled that the FCC does not have the authority to compel Verizon — and thus, other telecoms — to treat all traffic equally. In other words, the FCC can't ensure that telecoms won't discriminate among Internet traffic.

The ruling by the U.S. Court of Appeals for the District of Columbia reads: "Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order."

Making the Case

The gist of the net neutrality debate, and of this case in particular, is whether broadband providers like Verizon or Comcast have the freedom to discriminate and give "express lanes" to certain websites or services, ensuring that their content is delivered more quickly than others.

For supporters of net neutrality, this is akin to picking winners and losers online and defies the openness and neutrality that has always characterized the Internet. Likewise, the FCC said such a scenario would represent “widespread interference with the Internet's openness.”

With that in mind, the FCC issued the Open Internet Order in 2010, preventing ISPs from interfering with Internet traffic. But according to today's ruling, the commission lacked authority to enact such rules.

Two key decisions over the past decade paved the way for Tuesday's ruling. In 2002, the Bush-era FCC deregulated the broadband market, classifying cable companies like Time Warner Cable or Comcast as "information services." Then, in 2005, DSL Internet providers like Verizon and AT&T were also classified as "information services."

According to the Telecommunications Act of 1996, the FCC can broadly regulate "telecom services" and impose common carriers rules, initially established by the Communications Act of 1934, to avoid consumer discrimination.

Under common carrier rules, for example, phone companies can't discriminate one call from another. Once cable and telecom companies were classified as "information services," though, common carrier rules didn't apply anymore. Under Obama, the FCC didn't change those classifications, but simply issued the Open Internet order arguing that it had power to impose certain regulations.

But the the court disagreed with that interpretation today, arguing that the FCC didn't have that power and couldn't legally impose non-discrimination and non-blocking rules on Verizon and others.

The Aftermath

Tom Wheeler, the chairman of the FCC, reacted to the ruling by saying the commission will now consider "all available options." This includes appealing the ruling "to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans," he said.

After the ruling, Verizon said it "has been and remains committed to the open Internet," and tried to quell critics' worries that this ruling might be bad for Internet users.

"One thing is for sure: Today’s decision will not change consumers’ ability to access and use the Internet as they do now," Randal Milch, Verizon’s executive vice president, public policy and general counsel, said in a statement. "The court’s decision will allow more room for innovation, and consumers will have more choices to determine for themselves how they access and experience the Internet."

Internet freedom advocates, on the other hand, are already protesting the decision.

"We’re disappointed that the court came to this conclusion. Its ruling means that Internet users will be pitted against the biggest phone and cable companies — and in the absence of any oversight, these companies can now block and discriminate against their customers’ communications at will," said Craig Aaron, president and CEO of the advocacy group Free Press in a statement.

Harold Feld, the senior vice president of digital rights group Public Knowledge, also echoed this disappointment.

"The Court has taken away important FCC flexibility, and its opinion could complicate FCC efforts to transition the phone network to IP technology, promote broadband buildout, and other matters," he said in a statement.

You can read the full ruling below. We will continue to update this story with more details.

Mashable
is a global, multi-platform media and entertainment company. Powered by its own proprietary technology, Mashable is the go-to source for tech, digital culture and entertainment content for its dedicated and influential audience around the globe.